Natalie landed her first job after from college. The same year, she also started her first investment account. Having met with several brokers before choosing someone to work with, Natalie wanted to make certain that her investment choices would provide for long-term growth, yet satisfy her concern for diversification. The person who won her business prepared an asset allocation plan that would start her account by investing in several index funds. Her advisor has offered her a sound way to combine the concern for diversification since index funds are a sensible way for Natalie to start.

Question

Quizplus · Accepted Answer

Index funds are indexed to the total stock market. They usually consist of a wide variety of stock issues whose risk balances each other out. Although index funds cannot protect the investor from market risk (the market in general), they can help protect the investor from the specific risk that accompanies the stocks of specific industries.

Natalie Landed Her First Job After from College